Stocks in Qatar slumped to their lowest in more than a year Monday after five countries severed relations with the Gulf state.
Saudi Arabia, Bahrain, the United Arab Emirates, Yemen and Egypt have broken off diplomatic relations with Qatar over what they claim is its support of terrorism. Qatar said move is “unjustified.”
Qatar’s benchmark stock exchange plunged as much as 8% on Monday. Energy stocks were particularly hard hit, with Qatar Gas Transport Company and Qatar Fuel Company Q.S.C. both dropping more than 10%.
Qatar is the world’s largest liquefied natural gas exporter, according to the International Energy Agency. It supplies natural gas to many countries in the region, through a pipeline that runs from Qatar to the UAE and Oman.
Qatar is also a member of OPEC, the oil cartel led by Saudi Arabia. U.S. crude futures rose 0.6% to trade just below $48 per barrel.
Economic fallout was immediate: Some of the Middle East’s biggest airlines announced they are suspending flights to Qatar. Saudi Arabia said it’s closing all land, air and sea ports. Qatari nationals have been given two weeks notice to leave the UAE.
Qatar has a massive overseas investment portfolio that includes real estate and listed companies such as Volkswagen (VLKAF), Barclays (BCS) and Credit Suisse (CS).
